Forex Dictionary - Glossary of Terms & Definitions | Forexstepbystep.com

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Welcome to our Forex Dictionary, your comprehensive trading glossary designed to enhance your understanding of the foreign exchange market. This resource provides clear definitions of key terms and concepts essential for both novice and experienced traders. From foundational terms like "pip" (the smallest price movement in Forex markets) and "leverage" (the use of borrowed funds to increase potential returns), to more advanced concepts such as "carry trade" (a strategy that involves borrowing from a currency with a low interest rate and investing in one with a higher rate), our dictionary covers a wide array of terminology.

You’ll find explanations of market participants, including "brokers" (intermediaries that facilitate trades) and "market makers" (firms that provide liquidity by quoting both buy and sell prices). We also explain various trading strategies, such as "scalping" (short-term trading to exploit small price changes) and "swing trading" (holding positions for several days to capture price shifts). In addition to trading techniques, our glossary encompasses risk management terms like "stop-loss order" (an order to sell a security when it reaches a certain price) and "margin" (the collateral required to open and maintain a leveraged position).

Furthermore, we delve into market analysis methodologies, including "fundamental analysis" (evaluating economic indicators and news) and "technical analysis" (using charts and indicators to predict future price movements). Each term is crafted to impart vital knowledge, aiding traders in making informed decisions while navigating the complexities of Forex trading. Whether you’re looking to familiarize yourself with essential jargon or seeking insights into more sophisticated concepts, our Forex Dictionary serves as an invaluable tool for improving your trading fluency and overall market comprehension. Start your journey today and empower yourself with the terminology that drives the Forex markets. Happy trading!

Browse the glossary using this index

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G

Gann Analysis

Gann analysis, developed by trader W.D. Gann, is a method of technical analysis that employs a unique set of geometric angles, time cycles, and mathematical relationships to predict price movements and market trends. Gann believed that price and time are interrelated, and his techniques often involve the use of Gann angles, which are tools drawn from significant price points to create support and resistance levels at various angles. Additionally, Gann reintroduced the concept of cycles and has methods for forecasting based on historical data and mathematical patterns. Traders using Gann analysis look for confluence between price levels and time to identify potential reversal points in the market.

Guppy

The GBP/JPY currency pair, often referred to as "Guppy," is known for its high volatility and is popular among traders due to the distinct economic influences of the British pound and Japanese yen. This pair is affected by various factors, including interest rate differentials, geopolitical events, and economic data from both the UK and Japan. Traders typically analyze technical indicators and use strategies such as carry trading or trend following to capitalize on price movements. Given its volatility, proper risk management is crucial when trading GBP/JPY.